Alaska Gov. eyes citizen investment in gas line - Yahoo! News

ANCHORAGE, Alaska (Reuters) - Alaska Governor Frank Murkowski said on Thursday he wants to give state residents the chance to invest directly in a proposed natural gas pipeline.
The governor said he would introduce a plan to the state legislature that would allow citizens to divert part or all of their Alaska Permanent Fund dividends -- annual payouts to nearly all residents from the state-owned $33 billion trust account built from past oil earnings -- into shares of the proposed gas pipeline from Arctic Alaska to the U.S. Midwest.
Murkowski said he would propose allowing residents to indicate on dividend applications if they want to put it in the planned 20-percent state share of the pipeline, which would run about 3,500 miles and cost more than $20 billion.
All dividend recipients would have "the same access" to the pipeline investment, Murkowski said in a speech to the Alaska Federation of Natives. He added the plan would give Alaskans an opportunity to get the same annual return, probably 12.5 percent, that the state expects from its pipeline investment.
Murkowski's negotiated gas pipeline deal with the three major Alaska oil producers -- ConocoPhillips, Exxon Mobil Corp. and BP Plc -- stipulates that the state invest in a 20 percent share of the project.
Details of the public investment proposal have yet to be settled, but the system would probably establish a type of preferred-stock category, Murkowski told reporters after his speech. He said a proposal will be presented to the legislature next week when it meets to discuss other pipeline issues.
Critics of the Republican governor, who say his deal with oil producers provides too many concessions to companies and shortchanges the public, did not welcome his investment plan.
"If you can get the same deal as the producers, jump in. If you're getting the same deal as the state, I'd advise caution," said state Senator Hollis French, an Anchorage Democrat.
House Minority Leader Ethan Berkowitz, also an Anchorage Democrat, supported the idea of allowing Alaskans to invest in the pipeline, but said he anticipated potential legal problems with citizens contributing to the state's 20 percent holding.
"It's a good idea encased in something potentially toxic," he said.
Lawmakers have yet to approve Murkowski's proposed contract.
Also on Thursday, another Murkowski proposal suffered a setback. Two top Republicans, House Speaker John Harris and Senate Resources Chairman Tom Wagoner, said they would abandon the governor's proposed net-profits tax on oil production and instead revamp the current tax on gross production.
As part of his deal with the oil producers, Murkowski proposed to replace the current tax system with a net-profits tax and freeze that tax rate for decades. But Harris said a reform of the gross-production oil tax was a better option.
"It's simpler. It's less confusing. And it's much easier to explain," he said, arguing against linking the oil tax to the pipeline "because that is complicating things quite a bit."